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WAPA BOARD APPROVES PHASE I OF MIDLAND SUBSTATION PROJECT

(Friday, July 22, 2011)

    The Virgin Islands Water and Power Authority Governing Board convened its first monthly meeting of the fiscal year, which is also considered its annual meeting, on St. Thomas. The Board approved all items put forth by the Planning and Economic Development, and the Finance and Audit Committees.  Included in those approvals is the contract to Dashiell Corporation for phase I of the Midland Substation Project on St. Croix and the approval of additional funds for further study by Siemens Energy, Inc. on the proposed interconnection project with Puerto Rico.  Also authorized was the extension of the Ernst and Young, LLP contract to audit the Authority’s Financial Statements for Fiscal Year 2011, along with, the emergency approval for stack testing of the generating units at the Estate Richmond facility to comply with an Environmental Protection Agency order.

    To reduce the electric distribution system line loss on St. Croix and to provide better reliability to customers, the Board authorized the contract to Dashiell Corporation to construct the Midland Substation.  “St. Croix currently only has one substation, which causes a significant voltage drop on the western part of the island,” said Executive Director Hugo V. Hodge, Jr.  “It’s a very important project for St. Croix as it will bring the transmission and distribution grid to the next level.”  This project will be completed in two phases that will include design, procurement, construction, installation and commissioning.  The total cost of the project is $9,915,388.

    The Board appropriated an additional $4,000 to allow Siemens Energy, Inc. to further evaluate the integration of renewable energy onto WAPA’s electrical system and how it will impact on the proposed interconnection project with Puerto Rico.  The study will allow WAPA to know the maximum amount of renewable energy that can be installed on each island, while maintaining adequate levels of reliability.  “As we explore renewable energy…wind and solar…we will have knowledge as to what the grid could take, without bringing harm to the reliability of the grid,” said Hodge.  Siemens recently completed and submitted to WAPA, on Wednesday, its evaluation of the feasibility of the proposed interconnection project between Puerto Rico and St. Thomas, as well as, Puerto Rico and St. Croix.  After the meeting, Hodge said board members are now reviewing the report, which was funded by the U.S. Department of Energy, the V.I. Energy Office and the V.I. Legislature, and will share more information about its content very soon.

    The contract with Ernst and Young, LLP to perform the external audit of the Authority’s Financial Statements and Single Audit for FY2011 was extended by the Board.  This contract will cost $295,000.  The audit will provide accurate financial information for management’s analysis and planning.  Joseph Boschulte, Chief Financial Officer, said this is the Authority’s fifth year being audited by this company.  He also said that a Request for Proposal for future contracts will go out in the fall, with the intention of receiving bids from other qualified auditing firms.

    Stack testing of the generating units at the Estate Richmond facility is an EPA requirement necessary to meet the Authority’s federal and local emissions requirements.  The work must being within the next 30 days to meet EPA’s mandates.  As a result, the board approved the contract of $405,000 to Arcadis, Inc., whose principal technicians are familiar with the Authority’s facility.  The contract award is subject to the Authority and Arcadis negotiating and entering into a mutually acceptable agreement.

    Maurice Sebastien, Assistant Chief Financial Officer, presented the Financial Reports.  As of May 2011, the Authority is in compliance with its statutory requirements for the Electric and Water Systems.  However, Sebastian told the Board, while the Authority is showing a net revenue profit, our cash flow is hampered by the lack of payment for service provided to power streetlights and to provide water and power to the Juan Luis Hospital.  The streetlight past-due accounts receivables amount to $10.7 million through May 30, 2011, and $3 million is currently owed by the Juan Luis Hospital.  Sebastien indicated that streetlights are funded through the collection of property taxes and also informed the Board that a meeting is forthcoming with the directors at the Juan F. Luis Hospital to discuss the lingering the debt.

    During his executive report, Hodge notified the Board that the waste heat recovery boiler on St. Thomas is back in service, after being down to repair leaks.  “This will provide some savings to our customers,” said Hodge.  He also noted that the newly installed underground cable to St. John from St. Thomas, is in service and operating as expected.

    Board members also elected officers at this meeting. Juanita Young was again elected Chairperson, however Atty. Gerald Groner will now hold the post of Vice Chair.  Noel Loftus remains as Secretary.

    Attending were Brenda Benjamin, Vice Chair; Noel Loftus, Secretary; Atty. Gerald Groner; Cheryl Boynes-Jackson; Energy Office Director Karl Knight; Licensing and Consumer Affairs Commissioner Wayne Biggs and Department of Planning and Natural Resources Commissioner Alicia Barnes. Board Chair, Juanita Young and Donald Francois were excused.